10 Expenses You Can't Deduct on Your Tax Return

If you want to shrink your tax bill or beef up your refund, claiming all the deductions you’re eligible for can be a smart strategy. Deductions reduce your taxable income. That’s a plus if you want to hang on to as many of your hard-earned dollars as possible. But there are limits on what you can deduct. A financial advisor can help you figure out exactly what you should do with your taxes. Here’s a look at some expenses you can’t deduct in most cases.

1. Pet Care Expenses

Fluffy may seem like a member of the family. But that doesn’t mean you can claim her as a dependent or get a deduction for her day-to-day care. You may, however, be able to claim a deduction for certain animal-related expenses if you own a business or you’ve donated pet food or other items to an approved charity.

2. Commuting Expenses

While business-related travel expenses (including the cost of flights and hotel stays) may be deductible, ordinary commuting expenses are not. If you take a bus, taxi or subway to get to work each day, you can’t deduct those costs on your tax return as business expenses. You may be eligible for a deduction, however, if you’re paying to travel to a training session or conference held outside of your office.

3. Donations to Non-Qualifying Charities

Giving to a good cause can help you out at tax time, but only if you’re donating to a qualified charity. Handing out cash to a friend or relative who’s struggling to find a job, for example, is certainly charitable. But it won’t help you score a tax break. You’ll need to make sure you check the validity of any charity you want to donate to before donating if you want to take advantage of a tax deduction.

4. Home Improvement Expenses

9 Expenses You Can't Deduct On Your Tax Return

Home improvement expenses generally aren’t deductible. One exception involves the renovations you make to a home office. Not everyone can take the home office deduction. But if you have a legitimate reason for claiming it, you may be able to deduct the cost of any upgrades you’ve made to your home office. Capital improvements – changes that increase the value of the home – can be deducted, but not until you sell the home.

5. Gym Membership Fees and Plastic Surgery Expenses

The IRS doesn’t cut you a break if you decide to start hitting the gym or get liposuction. There’s only a possibility that the cost of plastic surgery may be deductible if your doctor deems it necessary for your health and well-being.

6. Time Spent as a Volunteer

Volunteering can be an enriching experience and while there are certain volunteer-related expenses that you can write off, your time isn’t one of them. The IRS does allow you to deduct certain costs associated with volunteering, such as money you pay out of pocket to purchase a uniform and travel expenses that you weren’t reimbursed for while volunteering away from home.

7. Child Support Payments

If you’re on the receiving end of child support payments, they won’t count as taxable income. And if you’re paying child support, you can’t get an extra deduction. Alimony payments, on the other hand, are always tax-deductible if they’re made while a couple is legally separated or divorced.

8. Homeowners Insurance Payments

If you own a home, having the right insurance is a must if you want peace of mind. But unfortunately, there’s no deduction for paying your premiums for a policy that covers your primary residence. You can deduct homeowners insurance premiums for properties that produce income. You can also deduct things like mortgage loan points, mortgage loan interest, real estate taxes and property taxes.

9. Babysitter Fees

The money you pay someone to watch your kids usually doesn’t have a place on your tax return. It may be deductible, however, if you can prove that someone was babysitting your children while you were volunteering for a qualified charity. There’s another upside if you’re paying childcare fees regularly. You may be able to recoup the cost of some of those expenses if you qualify for the Child and Dependent Care Credit.

10. Entertainment Expenses

Entertainment expenses used to be a common tax write-off for businesses, but recent tax law changes have significantly narrowed what qualifies. In most cases, costs related to entertainment, amusement or recreation, such as sporting events, concerts, theater tickets or golf outings, are no longer deductible, even if the purpose is to build or maintain business relationships.

The restriction applies whether the entertainment is directly tied to business discussions or includes clients, customers or employees. Simply talking business during or around the activity doesn’t make the expense deductible under current IRS rules.

Bottom Line

Knowing which expenses you can’t deduct is just as important as understanding the deductions you can claim, since mistakes can lead to lost tax savings or IRS issues. Many everyday costs, from commuting and entertainment to personal legal fees and home improvements, are considered nondeductible under current tax rules. Being aware of these limitations can help you plan spending and record keeping more effectively throughout the year.

Tips to Get Through Tax Season

Deductions aren’t the only way you can save money on your tax bill. Many financial advisors also offer tax minimization strategies as part of the financial planning process. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you want to get a head start on your taxes, SmartAsset’s tax return calculator can estimate how much you may end up owing in taxes or receiving in a refund this year.